Shocking Behavior : Random Wealth in Antebellum Georgia and Human Capital Across Generations
Does the lack of wealth constrain parents' investments in the human capital of their descendants? We conduct a fifty-year followup of an episode in which such constraints would have been plausibly relaxed by a random allocation of wealth to families. We track descendants of those eligible to win in Georgia's Cherokee Land Lottery of 1832, which had nearly universal participation among adult white males. Winners received close to the median level of wealth - a large financial windfall orthogonal to parents' underlying characteristics that might have also affected their children's human capital. Although winners had slightly more children than non-winners, they did not send them to school more. Sons of winners have no better adult outcomes (wealth, income, literacy) than the sons of non-winners, and winners' grandchildren do not have higher literacy or school attendance than non-winners' grandchildren. This suggests only a limited role for family financial resources in the transmission of human capital across generations and a potentially more important role for other factors that persist through family lines.
For comments on early versions, we thank Lou Cain, Greg Clark, Robert Pollack, Chris Roudiez, Rachel Soloveichik, and seminar and conference participants at the NBER Cohort Studies meeting, the Stanford SITE meeting, the University of Washington, the University of Michigan, the University of Chicago, and the Minnesota Population Center and for helpful comments, to Steven Ruggles for access to a preliminary version of the 1850 full-count file. Bleakley gratefully acknowledges research support from the Center on Aging, the Center for Population Economics, the Stigler Center, and the Deans' Office of the Booth School of Business, all at the University of Chicago. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Hoyt Bleakley & Joseph Ferrie, 2016. "Shocking Behavior: Random Wealth in Antebellum Georgia and Human Capital Across Generations," The Quarterly Journal of Economics, vol 131(3), pages 1455-1495. citation courtesy of